PINKI GUPTA,NEW DELHI vs. INCOME TAX OFFICER, WARD - 35(1), NEW DELHI, NEW DELHI

ITA 1860/DEL/2026Status: DisposedITAT Delhi30 September 2026AY 2012-135 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that there was substance in the assessee's contention that the reopening was based on incorrect facts. The records indicated that an assessment order under Section 143(3) was passed on 11.08.2014. The AO's reasons for reopening, which stated that the assessee's return was processed under Section 143(1) and no assessment was made, were factually incorrect. The Tribunal found that when the foundational facts for the assumption of jurisdiction are recorded incorrectly, the assumption of jurisdiction is vitiated. Furthermore, since the reopening was after the expiry of three years from the end of the relevant assessment year, the first proviso of Section 147 was applicable. This required the AO to record reasons specifically indicating the assessee's failure to disclose fully and truly all material facts. The Tribunal noted that the AO's incorrect premise that no Section 143(3) assessment was made meant the AO had not applied his mind to the specific failure of the assessee to disclose material facts. Consequently, there was a patent illegality in the assumption of jurisdiction. The Tribunal sustained grounds 2 to 4 of the assessee's appeal, quashed the impugned assessment order, and allowed the appeal.

What were the facts?

The assessee, Pinki Gupta, is an individual engaged in the business of trading electronic goods. For Assessment Year 2012-13, she filed a return declaring a turnover of Rs. 11,30,63,052/- and a gross profit margin of 2.44%. An assessment order under Section 143(3) was initially passed on 11.08.2014. Subsequently, the case was reopened based on information received from the investigation wing regarding high-value transactions in the assessee's bank accounts. The Assessing Officer (AO) considered a differential amount of Rs. 40,47,38,765/- as undisclosed sales, leading to a profit addition of Rs. 98,75,552/-. The Commissioner (Appeals) dismissed the assessee's appeal and enhanced the addition to Rs. 4,04,70,000/-. The assessee appealed to the Tribunal, challenging the reopening on the grounds of incorrect facts.

What were the issues?

1. Whether the reopening of assessment for AY 2012-13, initiated by notice dated 30.03.2019, is valid when based on incorrect facts regarding the prior assessment proceedings, thereby rendering the entire assessment void-ab-initio, as per Section 147 of the Income Tax Act, 1961? Assessee's contentions: The assessee argued that the reopening was based on incorrect facts. Specifically, the reasons recorded by the AO incorrectly stated that no assessment under Section 143(3) was made, whereas an assessment order dated 11.08.2014 was indeed passed. The assessee contended that this factual error vitiated the assumption of jurisdiction. Reliance was placed on the Coordinate Bench decision in RMP Holding (P) Ltd. Vs. ITO and various other High Court and Tribunal decisions including Duli Chand Singhania v. ACIT, WelIntertrade P. Ltd. v. ITO, Haryana Acrylic Manufacturing Co. v. CIT, Willmar Schwabe India (P) Ltd. v. ACIT, PCIT v. Samsung India Electronics (P.) Ltd., Milton Plastic v. Mudit Nagpal, PCIT V. M/s Light Carts Pvt. Ltd., ACIT v. Neeraj Kumar Singhal, and M/s Soul Jewels V. ACIT. Revenue's contentions: The Revenue relied on the impugned orders and argued that the plea of incorrect facts was being raised at a belated stage. The Revenue submitted that the reopening was based on Explanation 2(b) of Section 147, and the assessee's return was processed under Section 143(1), with no original assessment under Section 143(3).

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 143(1),Section 139

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES, NEW DELHI

Before: SHRI ANUBHAV SHARMA & SHRI SANJAY AWASTHI

Pronounced: 30.09.2026

PERSHRI ANUBHAV SHARMA, JUDICIAL MEMBER:

This appeal is preferred by the assessee against the order dated 24.12.2025 of the Ld. National Faceless Appeal Centre, Delhi (hereinafter

ITA 1860/DEL/2026 PINKI GUPTA

referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No: ITBA/NFAC/S/250/2025-26/1084050005(1) arising out of the assessment order dated 30.12.2019 u/s 143(3)r.w.s 147

The order continues below.

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